Embracer Group anticipates a decline in net sales for PC, console, and mobile games in the fiscal year 2024/25

Embracer Group has released its financial outcomes for the closing quarter of March 2025, facing reductions in both its PC/console and mobile divisions over the quarter and the fiscal year.

The annual report discloses that Embracer has scaled back its game development projects from 141 to 108 and reduced its workforce from 9692 to 7180 employees, with 5378 serving as game developers.

Financial Highlights

For the quarter ending March 31, 2025

Net sales: SEK 5.4 billion ($560.5 million, a 6% decrease compared to the previous year)
PC/Console games: SEK 3 billion ($311.4 million, a 2% decline year-on-year)
Mobile: SEK 943 million ($97.9 million, down 31% from last year)
Entertainment & services: SEK 1.3 billion ($134.9 million, a 9% increase compared to the previous year)

Full-year results for the period ending March 31, 2025

Net sales: SEK 22.3 billion ($2.32 billion, an 18% reduction from the previous year)
PC/Console games: SEK 1.5 billion ($155.7 million, down 27% year-on-year)
Mobile: SEK 5.3 billion ($550 million, a 9% decrease compared to the prior year)
Entertainment & services: SEK 6.5 billion ($674.6 million, down 7% year-on-year)

The company credits a "solid" end to the quarter to the success of 'Kingdom Come Deliverance 2,' which sold three million copies and was well received by both players and critics. Embracer plans to release DLC and free updates over the next 12 months to sustain player interest.

Embracer distinguishes between actual figures and organic growth, reporting a 31% drop in mobile game sales from January to March, but noting a 30% organic growth. Likewise, PC/console game sales recorded an "organic growth" of 22%.

Significant progress has been noted in the company's transformation plan, highlighted by the divestment of Easybrain and Asmodee, with plans to spin off Coffee Stain Group by year-end, according to reports.

CEO Lars Wingefors remarked, "In a strong finish to the year, net sales increased by 19% organically to SEK 5.4 billion, with Adjusted EBIT up 44% year-on-year pro forma to SEK 1.1 billion, and free cash flow hitting SEK 1.0 billion in Q4. 'Kingdom Come: Deliverance II' sold three million copies post-quarter-end, boosting organic growth in the Mobile sector to 30% year-on-year. By 2025, we plan to spin off Coffee Stain Group. Our financial stance is robust, and we're committed to improving efficiency and long-term resilience in anticipation of the spin-off."

Future Outlook

The company anticipates releasing 76 games in the FY 2025/26, featuring a combination of new intellectual properties, sequels, and remakes. Titles include 'Metal Eden,' a remake of 'Gothic 1,' 'Reanimal,' 'Fellowship,' 'Wreckreation,' the latest 'SpongeBob SquarePants' game, 'Norse: Oath of Blood,' and 'Deep Rock Galactic: Rogue Core.' Two major titles, 'Killing Floor 3' set for Q2, and 'Marvel 1943: Rise of the Hydra,' expected in FY 25/26, are also in the pipeline. Embracer notes that 'Marvel 1943: Rise of Hydra' is anticipated to generate significant revenue, albeit with lower margins due to revenue-sharing with partners.

A third title previously slated for release has been deferred to 2026/27 to allow for further development, with nine additional AAA projects expected between the 2027/28 and 2028/29 fiscal years.

Additionally, THQ Nordic's studio Campfire Cabal has reportedly resumed operations, having never fully ceased activities despite its closure in 2023 due to restructuring efforts by its parent company Embracer, as outlined in previous reports.